India plans to launch new policies for the electric vehicle industry to attract global giants

According to informed sources, the Indian government is about to open the application channel for its flagship industrial policy, which aims to attract global electric vehicle manufacturers to set up local production facilities in India by offering import duty exemptions. This policy, announced in March 2024, stipulates that if the selling price of imported electric vehicles exceeds $35,000, and the company commits to investing at least 41.5 billion rupees (approximately $500 million) in establishing a local factory in India within three years, the import duty can be reduced to 15%. Eligible companies can enjoy this duty exemption for importing up to 8,000 vehicles per year. Sources indicate that the application channel for this policy may open as early as this month and will continue until March 15 of next year. As the third-largest economy in Asia, India is striving to attract electric vehicle manufacturers represented by Tesla (TSLA.US), led by Elon Musk. For many years, Tesla has criticized India's high tariff policies but is currently preparing to launch its products in the Indian market. Despite a slowdown in electric vehicle demand in other parts of the world, India remains a market hotspot in this field. If this new policy successfully attracts industry giants, local companies currently dominating the Indian electric vehicle market will face intensified competition. Informed sources added that while the overall framework of the policy is consistent with what was announced last year, the government led by Prime Minister Modi has tightened some conditions to filter out non-serious participants. For example, the policy has raised the financial entry threshold for companies, requiring approved companies to achieve at least 50 billion rupees in revenue in the fourth year, with the following year's revenue needing to reach 75 billion rupees. Companies that fail to meet these targets will face fines of up to 3% of the revenue shortfall. The Indian Ministry of Heavy Industries has not yet responded to requests for comment on this matter. Tesla Shows Little Interest in Local Production However, an Indian federal minister stated on Monday that Tesla has no intention of establishing a vehicle production base in India, while foreign car companies such as Mercedes-Benz and Volkswagen (VWAGY.US) are closely monitoring the newly introduced electric vehicle policies in India. Currently, local companies such as Tata Motors and Mahindra have invested hundreds of millions of dollars in localizing electric vehicle production and continue to increase their investments. These companies have previously lobbied the government to maintain the current tariff levels. Data shows that in 2024, electric vehicles will account for only 2.5% of India's total car sales of 4.3 million units (mainly dominated by Tata Motors). The Indian government plans to increase this proportion to 30% by 2030